tv Piers Morgan Tonight CNN July 29, 2011 12:00am-1:00am PDT
>> the american people have said enough. >> it's time for somebody in this town to say yes. >> nothing gets washington's attention like a deadline. what are they waiting for? >> americans deserve an honest approach. no more tricks. no more accounting gimmicks. no more broken promises. >> tonight, the white house, the right, the left and the clock. countdown to crisis. >> we are four days away from one of the worst financial catastrophes that could face this country. >> this is "piers morgan tonight." good evening. chaos on capitol hill tonight. john boehner's debt plan is stalled in the house without support from his caucus. this country is moving closer and closer to an almost unthinkable national default.
we are going to ask some of the smartest people in washington to explain what is going on tonight. john king, jessica yellin. first, i want to go straight to is that they're trying to win over some of the undecides of some of the no votes amongst the conservatives in their party. what they were discussing at one point was trying to tweak the bill in order to win over
conservatives who are unhappy that the bill didn't go far enough, piers. and what they were talking about doing is making the second debt ceiling vote that is part of this bill, making that increase contingent upon congressional passage of a balanced budget amendment. this goes further than the bill does at this point. they thought this was going to win over conservatives. conservatives shot it down in the room. and they're back at square one. so what we're told is that their leaders are meeting this evening still at this hour. they're still talking and they will be meeting with their conference, all of their republican members, tomorrow at 10:00 a.m. but let's be honest. this is not how they wanted this to go. they do not have the support at this moment. and it does not show well for the house republican leadership. at the very same time, piers, no question everyone's eyes are going to be on the markets tomorrow. >> we now have what seems to be a complete impasse. the republican party in disarray, split with the tea party pushing one agenda, others pushing another.
nobody seems any closer to a deal. in fact if anything further away. when the markets open there could be a real reaction here, couldn't there? >> there very well could be. what we're talking about is absolute uncertainty up here at the moment. we are only ticking closer, i would even say racing towards this debt ceiling deadline at this point. and still you and i even tal
normally, i would think that republicans in a meltdown with each other is a good thing for the white house. not today, right? this can't be helpful. >> no, it's harmful because we are running out of time. we have a little more than 100 hours before we hit the august 2nd deadline. we are spending hour after hour waiting for the republicans to twist arms for a vote that is irrelevant. as soon as they pass it, if they are able to, the senate will vote it down and we have to get back to the table. >> it's worrying that speaker boehner doesn't have control of his party today. there's a sense the tea party element of the republicans driving this delay. yesterday, we saw senator mccain calling them hobbits. they are in a meltdown here. it's not helpful to the american people.
at the moment, as things stand, do you have any hope of doing a deal? >> absolutely we do. the deal is not that hard. everyone knows what we need to do here. make spending cuts that democrats and republicans agree to. we need a mechanism in place to make a serious debt reduction. we have to make sure we are not having the same fight over the christmas holiday. it's easy to do if the republicans move in the right direction. anything that got out of the house of representatives needs democrat and republican votes. hopefully the people can get to work and find the compromise to get it done. the clock is ticking, but there's time. >> what are the options here for the president? you have publicly ruled out from the white house deploying the 14th amendment. would you consider a veto? where are we going here? something has to happen, doesn't it? >> the only thing to break the
impasse, the stalemate is compromise. this is how the problem has been solved for 50 years and how it was solved the last six times speaker boehner voted for a debt limit like this. it's been done with democratic presidents and republican presidents. it's what we need to do here. it's inevitable because the leaders all said default is not an option. we take them at their word. we need to see actions to back the words up. >> do you guys really appreciate how ridiculous this all looks to ordinary people? >> yes. we absolutely do. it is a -- there is a dysfunctional system right now. the reason it's dysfunctional is we have divided government. that requires compromise. even though we have had big disputes over the years, there's been a situation where parties work together for things that have to happen.
i know people around the country are frustrated and angry. the president shares that frustration. it's why the phone lines are jammed on the hill. e-mails and websites are going down because people don't understand why compromise is a dirty word in this town. >> how much responsibility does the white house take for the current economy. there comes a point when blaming george bush no longer holds water. when you look at the credit rating coming down, how much blame are you guys taking in that? >> what the president has said is we didn't get into this mess overnight and we are not going to get out overnight. the president inherited financial challenges. we are working to get out of it. the president said the recovery is happening, but not fast enough. we are not creating enough jobs,
the economy is not working. if we are going to have a real solution, it has to be republicans and democrats working together. it's pushing them to get the debt fight over with. the trade agreements stuck in congress, the extension in the payroll tax cut passed in december of last year. there are things we can do. we have to get past the current impasse we have in congress. we have seen top ceos from jp morgan demanding a resolution. their concern is not with default, but as it drags out, the threat of the credit rating gets more urgent and realistic. you could get a situation where it happens before a default. are you concerned about that? >> well, we are certainly concerned about a potential downgrade.
it's why we have been pushing to get it resolved. the house of representatives refuses to do anything other than 100% of what they want. until that happens, we can't get something through congress. you are right about the ceos. it's small businesses on main street. they are concerned about this. it's creating tremendous uncertainty. it has to be resolved. this is serious business. all the games happening are so damaging. >> that has president responded yet? >> people all across the white house have been in touch with ceos around the country. he's trying to push congress as quickly as they can. we are sitting here waiting hour after hour for the bill in the senate. it's holding this up. it's critical for the republicans to decide what is best for the country and find compromise.
>> if you are worried about the wording, how about you got us into the mess, leave me to sort it out. >> we are -- what we have to do is focus on finding a way to compromise and everyone and anyone who can call the republicans and the house and let them know how frustrated they are, whether a ceo on wall street or average american fed up, that's what needs to happen. >> final question, dan pfeiffer, obviously a default is unprecedented. the first in the history of america and the first for any president. does the president have sleepless nights about this? it could be a catastrophe for his administration. >> this is an unthinkable situation that we could actually be in a place where on 12:01, august 3, we may not be able to
pay the bills. this isn't about new spending. this is about paying for spending we have done. paying for tax cuts from ten years ago. paying for wars. paying for other things that have run out. this is serious. tremendous effects on the overall economy. we have to get this done. it's dangerous to be playing games with something so important. >> dan pfeiffer, thank you very much. >> thank you, piers. price-line ne-go-ti-a-tor. so, you've been double crossed by other travel sites and now you want to try the real deal. yes, is it true that name your own price... ...got even easier? affirmative. we'll show you other people's winning hotel bids.
from doing other things like focusing on jobs and the economy. it makes no sense to do this for three months. our republican colleagues in the house are playing a game here. speaker boehner has to keep throwing piece after piece after piece of red meat to the hard right lion that seems to be dominating the caucus. it's time to tame the lion, not throw red meat to him. it's not going to accomplish anything. there's talk they have to change the bill. one of the rumors is they are changing it because some of the conservatives want to cut back on pell grants, money that helps kids go to college. it's got overwhelming support of help to the american people. it shouldn't be 100 or 80 hard right people who don't represent america or the republican party, determining what is done here. thus far, speaker boehner allowed that to happen.
>> it's fascinating to listen to the democrats at the moment, with your sweet, innocent smiles, it's the republican's fault, nothing to do with us. the reality is you have continued to preside over a tanking economy. the point to keep blaming president bush and the republicans is getting to the point where you can't do it anymore, isn't it? >> well, you can talk about the economy. we want to get back and work on jobs, legislation and many other things they block. look, they believe in cutting. we believe that there ought to be revenues on the highest income people to balance the budget. we have moved a great deal. we are willing to make significant cuts. have they moved one nickel? one nickel off revenues? they have said no to everything.
i know it's in the media to say you are both to blame. in this case, it's been the hard, hard right that refused to compromise that thinks default would be okay who is calling all the shots and holding everything up. i would hope speaker boehner and mitch mcconnell would understand that and step up to the plate and start talking to leader reid and try to make a compromise. we have shown we are willing to move way off our starting gate to compromise. they haven't moved a dime off it. >> the president does have an option of course, under the 14th amendment to go it alone. why wouldn't he do that? wouldn't that be the master stroke to say i can't work with these republicans for a second longer, the country comes first, i have the power to do this and i'm going to do it. >> here is the -- the ideal situation, frankly, is to raise the debt ceiling.
it's been done 39 times before by republicans and democrats alike. never before has a group said we are not raising the debt ceiling unless our conditions are met. that's playing with fire. it's as if you have a mortgage on your house and you tell the banker, unless you build another room on my house, i'm not paying the mortgage. it doesn't make sense. the same thing is happening here. here is what we think will happen. the boehner bill, they will try to figure out a way to pass it. if they do, it's defeated in the senate. 53 senators signed a letter saying they won't vote for it. she saw the letter and she's saying that's the way to go. it's like being in never never land. the reid bill will come to the floor. it's compromising. some things republicans like, some things democrats like. it meets the two criteria the
republicans asked for. no revenues. an amount of cuts equal to the amount of raising the debt ceiling. it's not our criteria, it's a republican criterion. then that will be on the floor and that will be the last vote. a yes vote on that will mean you don't want to default. a no vote means you'll default. at the end of the day, it's a better way to go. at the end of the day our republican colleagues will join us. it doesn't violate a single one of their principles. >> if we get to next week and america does default, do you think the decent thing to do would be for all of you to resign? >> god forbid we default. we are working hard to make sure it doesn't happen. again, that's the question that says everyone is to blame. in this case, everyone is not to blame. the hard right, which doesn't represent america refuses to compromise.
a lot of people in america waiting for you guys to do something. what is holding it up? >> well, frankly, right now, we have all kind of politics going on that are, as i call it, toxic. the house of representatives sent two proposals, both of which are going to die on the senate. in the senate, there's no plan available that really does deal in a realistic way with the spending problems that we have. i'm concerned that we may not be able to resolve the issue with one of the two on the table now. i'm hopeful that the gang of six proposal will receive greater attention. we are developing broader support for it in the senate. more than a third of the senators have approved it. hopefully, at some point, a comprehensive approach like that, a $4 trillion approach is
what the credit agencies told us we need to look away from their concern about downgrading american credit. >> the situation seems to most to be the democrats not showering themselves in glory here. they seem on the same sheet. the republicans are completely split, aren't they? you have the tea party saying no, we are not going to sign on to any deal. they don't want any revenue on taxation. they are saying no, we're not having this. your party is split in two. how does that help america and the american people who are 100 hours or so from the biggest financial crisis the country has ever seen? >> i don't agree that the republicans are split in two. the republican party united in the house and senate that sent to the senate the budget.
sent them a proposal to put cuts in place and caps in place that were modest in terms of the issue we are dealing with and asked for a vote on the balanced budget amendment. that was rejected in the senate. now, they are proposing to send another proposal that will try to find the common ground. that will be rejected by the senate or vetoed by the president. frankly, i think the republicans are trying to put forward alternatives here to simply walking away from the debt ceiling issue and the debt crisis. i point out, the credit agencies made it clear, it's not raising the debt ceiling. if we raise the debt ceiling without fiscal reforms attached to it to show the credit markets of the world that we mean business. then they will probably still downgrade us. >> most republicans, at the
moment, have a completely resolute view of taxation. most experts outside of america say of course that's what you have to do. until there's less by republicans on that key thing, how can you talk about a great reformation? >> first of all, the way we need to approach tax reform is to reduce rates and reduce the tax expenditures accordingly and grow the economy. that's the approach we took in the gang of six plan that is agreed to on a bipartisan basis. putting revenue into the equation through the right approach by making the tax code more competitive is key. that being said, the proposal to increase tax rates is one that the republicans across the board do not accept.
i think that's just one of the points where there is great disagreement. the president refuses to -- the republicans refuse to increase tax rates. it's that issue we have faced over the last three to four months. >> an embarrassing day for speaker boehner and not being able to push this vote through. has he lost control? >> i don't think he's lost control, but it's clear the effort of the speaker to come through with a third approach to try to put something forward to the senate that the democrats can accept is moving so far in that direction, he's moving votes on the other side. what we are seeing in the house right now is as the plan diminishes and gets less real, less powerful, we lose support.
mr. president, i'd like to start by talking to you about this current financial crisis that america has found itself in, literally 100 hours now from a possible default. when you were president of mexico, could you ever have imagined a scenario like this? >> no, not at all. i witnessed how u.s. debt and u.s. deficits been growing since time ago. but it's accelerating. and i think it's a very dangerous place what is going on today here in the united states. and i would ask anybody that is involved to find out a solution. because if not, only going to work against the u.s. economy. it will with the rest of the world. and i think that this moment just coming out of that other mammoth crisis that was also created in this nation, the world doesn't deserve this to be repeated. >> why has the world's number one superpower got itself into such a terrible mess financially? >> well, it's incredible. because people are not thinking
on the future. people is thinking on today. so the savings rate of this nation is very poor. in exchange, the consumption rate is incredible. so people and specifically government doesn't seem to be thinking about the next generation. and i think they deserve this nation to be much more careful than just out to spend itself. and when we have this huge challenge coming from asia, this transfer of this ship from the west to the east, not only of markets, not only of power but also on financial capacities. and if we don't do something in north america and do it very quickly -- and this i'm including mexico and canada through nafta -- we're going to lose this battle. and this shift is going to happen. i have witnessed in korea in japan when i do conferences that they're preparing to lead the world.
and the big question is, what is going to be the ideology? what are going to be the values if they start leading the part of the world? are we still going to have the deep commitment with democracy, with freedom, with equal opportunities to everybody? so where are we going to be leading the dream of the founding fathers of this nation? >> it's a very worrying time. it's a dangerous time as you say for the world's economy. when you see the politicians on both sides, democrat and republican, squabbling now, trading insults and all the rest of it with such a serious situation so close, what do you think of that? >> dangerous game that is being played here. and you know, in mexico i think and in part of latin america that the presidential system as we know it is over. i think -- are going to be the future. there you don't have this kind of situation.
everybody's forced to work towards cohesiveness, towards agreements. i think it's much better. in our presidential library, one of the ideas we're promoting strongly is to let people know, public opinion and politicians, that that other system, the parliamentary system, can be much better today. because either bipartisan like it's here, like the dog and the cat fighting for the bone, or a multiparty system like we have in mexico where 12 years after we reach a total democratic status we have not been able to make a democracy deliver. we have not been able to come to agreement to consensus. and so the key in the reform that we need are laying there dormant in congress. >> if you were president obama and you've been a president of mexico for six years, if you
were in his shoe right new and you're facing a $14 trillion debt in this country, what can he do quickly to try and sort things out, do you think? >> well, he has to negotiate. i mean, when you talk about the discussion, it has two parts. both the republicans and the democrats must find an agreement. they have to find it. and they have to find it in the very short term. >> the republicans are very adamant, many of them, that you cannot raise taxes even in such a crisis. many financial experts outside of america think of course taxation should go up. you've got to get revenue coming in as well as cutting spending. what do you think? >> yeah. but the economy has many combinations. all of them can be mutual if it's under an agreement. you can have an increased taxes when you need to do some
expenditures, well-invested in people, infrastructure, schools and everything. and that works. but also there are times where you have to pull the rope, slow down, and build up to the future. and i think this moment the least thing that this nation should be doing is increasing its deficit. spending more than what it has. so it has to be stopped on both ways. one, yes, increasing income and taxes, the other one is by reducing expenses. i mean, expense, talking about trillions. i asked this morning, what's the next figure? they tell me it's hundreds of trillions. i don't know what's the next. but in my time just 20 years ago we would talk about we would speak about billions. now we're talking trillions. and what is next? i mean, that cannot be -- >> is america going bust effectively? if it was a business, would it go bankrupt the way things are going? >> oh, yes, no doubt.
no doubt. if you get to spending more than what you have, you cannot just get loans and credit all the time. not even if you invest that productively. there's times when you have to refrain your expenses. i think that to keep the wealth of this nation, to keep the equality of life of people here, somebody has to start thinking about the future and the savings rate, reduce the deficits. and that would also benefit the rest of the world. look at latin america. how well we went through this mammoth crisis of '08 and '09 because we were controlling our deficits, which we did not in the past. because we have healthy economies, because we are very careful on inflation. and now so latin america fortunately one year was back to growth again. and this year latin america is
going to growth as the whole of the region over 5%. that's incredible. and that's the same thing that is happening in nations. that's what we see in those economies. why? because they think about the present and they think about the future. >> been a real pleasure. [ male announcer ] things seem better with travelocity's best price guarantee.
we are losing also our kids and our young kids, those that have died are people that are 15 and 25-year olds. another 45,000 got killed and many others -- >> what is the answer? the drugs were, let's give it an umbrella. it just doesn't seem to work on any level. the deaths continue, the numbers rise, the drug consumption increases. a war on drugs however hard people have gone on this doesn't work. >> it does not work. >> what can work, do you think? >> okay, i think first of all to have prohibition like this nation did 100 years ago. prohibitions to work. >> would you make drugs legal? >> i would make drugs legal like
they did in portugal, ten years after there is a 25% reduction on drug consumption. i help produce in this nation takes serious the idea of legalizing drugs because -- >> how does that work? it is an extraordinary statement to make from someone who is a world leader. are you suggesting any american could go into a pharmacy and by cocaine? >> yes, sir. leave it to his own responsibility, and the school system responsibility on educating. it is not ethical, not moral, that we request governments to cover our kids so they cannot reach drugs. we live in freedom and we believe in responsible use of freedom. >> poor people watching this is got children, who actually would
say in america, i don't think they would be tough enough on drugs. far from relaxing the law, they should be much harder, get to the dealers, get them in prison, take the drugs off the streets, what do you say to that? >> it is not working and it has proven it is not working, drug consumption is growing. this is the last prohibition, the last frontier because marriage between couples of the same sex now approved by our constitution, alcohol consumption is now free to do. cigarette consumption, people has to deal with this. it is the responsibility of each citizen to consume or not to consume drugs. number two is the responsibility of government to keep our kids safe and to make sure they return home safe. that is the government responsibility. our responsibility is to decide
on our own whether we're going to consume or not. this is a great answer to the problem, the same thing as the president from chile, people in the united nations, and many other intellectuals, a miami firm believer that this will bring in the solution. today, many more people dying for access and drinking alcohol or smoking cigarettes then overdoses on drugs. i think that is. number two, we have to withdraw the army from the streets. there are not prepared to do this work. they are constantly violating human rights, they constantly violate the due process, the judiciary process that each citizen deserves and it has the right to buy the constitution. look at guantanamo.
the u.s. army violated human rights every day for years. the army is for a different thing. we have to have a good police corps, we have to train in. >> the problem obviously with your concept, some people will understand the logic. the problem with it is when you have the education system, as fractured as it is in america right now, when you have parental responsibility at an all-time low, where is the responsibility actually going to be in reality? it is all very well saying it is to the parents and schools to control access but it is not going to happen, is it? >> we cannot over protect our kids, they have to be responsible and they are. not because it is legal or illegal that we consume more or less. they have to use their freedom and elect what they want to do. prohibition doesn't work. let me tell you about one prohibition.
they forbid it -- that was the first prohibition that was violated. >> you're right. i would agree with you on that. i will tell you what will happen. a lot of people reacting. if you want to talk about this go to twitter and give me your views because i have a feeling this could make a few headlines. we come back i want to talk to you about another contentious issue, immigration.
immigration as a fascinating one for any mexican because you correct me if i'm wrong. about eleven million illegal immigrants are currently in america. and of those, 60% are mexican. is that about right? >> yes, sir. prohibitions do work. walls to work. isolation doesn't work. and i explain myself. where hundreds of millions, maybe billions of dollars have been spent, is not working. we have better sense than that. our minds and intelligence to discuss in u.s. congress the best solution. i am sure the solution is not building walls and less so isolating. i don't know what this nation as a credit. >> this huge black market economy everyone is aware of.
a large number of these illegal immigrants are working using false documents and paper work and they are paying a bit of money to the employers as if they are regular law-abiding citizens. what do you think of that? is a scam and it is widespread and it is getting more widespread. do we turn a blind eye to that because they're doing a good job? >> first of all we have to recall this nation as a nation of immigrants. anybody watching either came from africa originally or from a year, they came from asia or latin america. our families did. so including my grandfather, he migrated from cincinnati to mexico looking for his american dream in 1895. it works both ways and it is in reaching to all nations. but i am not for open borders. we have to use our wisdom, orderly administrate this issue
and make sure that works to the benefit about the bus partners. >> what is the simple answer? >> the simple answer is to approve the initiative, the bill that was presented by senator kennedy and senator mccain in u.s. congress. that is right on target because it is not opening the borders for anybody to come here. regulates the amount of people that will be invited on a guest program to this nation. according to supply and demand. number two, it will legalize all of those who are here and that do have a job they're working for the construction industry of this nation, that are harvesting the vegetables in california, the apples in seattle, where those who are working in new york. that is why the mayor said this city would not work without all of this hispanic people and
immigrants that are working here. >> would you subscribe to amnesty? >> that is not the right word. that initiative calls number one legalize those who are already here and that have a job. if they don't have a job, put them out. they have a job and they are contributing to the economy, they deserve to be treated with all of their working rights and all of the dignity that they deserve. number two, every year, less determine an amount that the economy will demand from workers coming from outside because a lot of people here doesn't going to take their jobs. number three, the families. i mean, there are ethical values here involved. how can you separate a mother from his child. how do you separate a wife from his spouse. that is causing problems. ethical values that most people see.
those who qualify on the first two options i mentioned should have the right to have their families here. it is a temporary job for the year, they should be open to bring them for that year and then take them back. or they are offered that job and again and they should have the capacity to stay. and finally, if we don't work like that, this nation is in deep trouble pretty soon, economic trouble and think about the pension plans, their retirement plans. who was going to pay for them if this nation is not saving enough or if this nation is not bringing enough youth and energy to keep the economy growing to generate the pension plans for the elderly. who will nourish those elderly.